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U.S. Supreme Court

Miller v. New Orleans Acid & Fertilizer Co., 211 U.S. 496 (1909)

Miller v. New Orleans Acid & Fertilizer Company

No. 32

Argued December 1, 1908

Decided January 4, 1909

211 U.S. 496


Where the state court decides that a trustee in bankruptcy can avoid a preference under the state law against the contention that the exertion of such power conflicts with the Bankrupt Law, and that, if the preference is given by a member of a firm that the trustee need not establish that there were other individual creditors, federal questions are involved and necessarily decided, and the judgment does not rest on nonfederal grounds broad enough to sustain it, and may be reviewed by this Court under § 709, Rev.Stat.

Where no question is made below that the state court was not competent to authorize the trustee to prosecute, judgment in his favor will not be reversed when presumably the want of authority from the bankrupt court would have been supplied if challenged.

The authority to preserve liens of pending actions under subd. f of § 67 of the Bankrupt Law extends to causes of action under state law, and is cumulative, and not in abrogation of rights under the state law.

Where, as in Louisiana, copartnership creditors coequally share with individual creditors in the individual estates of the members of the firm, copartnership creditors are prejudiced by preferences made by chanroblesvirtualawlibrary

Page 211 U. S. 497

a member to individual creditors, and, if the preference is illegal under state law, the trustee can succeed to a suit of the partnership creditor in the state court even if there be no other individual creditors; but the distribution of the preferential payment when paid in depends, as between the individual and copartnership creditors, on the provisions of § 5 of the Bankrupt Law.

The facts are stated in the opinion.

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